The number of avenues to gain exposure to virtual currency is increasing. In the last year alone, a number of major financial institutions have taken an interest in this fast-paced new investment option. At the same time, many pseudo-banks have gone publicly public, intending to capture a piece of this expanding niche. While some companies are rapidly buying up so much of Bitcoin, others are still speculative in nature.
The popularity of this fast-emerging investment vehicle is not a surprise to those who have been following the story of how digital currencies like bitcoin were conceived and created. As the name suggests, the concept of using the Internet to facilitate the trading of traditional commodities like gold and oil is nothing new. However, what makes the process of trading in this alternative asset different is its unique ability to operate outside of traditional financial institutions. For those who would like to take advantage of its low fees and high liquidity rating, there are some avenues through which they can do so.
One of these avenues includes investing in digital wallets. Digital wallets provide a safe, secure way for users to store and safely keep their wealth. Unlike conventional savings accounts and checking accounts, digital currencies can retain their value even after incurring a significant investment amount. Unlike stocks and bonds, there is no need to worry about an investment default or possible redemption. All investments made in these assets are kept segregated in a secure offline facility from the rest of the network. This provides investors with peace of mind.
While there are several avenues through which investors can gain exposure to the emerging field of digital currencies, one of the best ways is through investing in a collection of select coins. Investing in a single bitcoin is likely to provide a modest return for the investor. The value of each bitcoin is likely to change significantly in a relatively short period of time. Fortunately, investors have the option of purchasing as many individual bitcoin as they desire. This allows them to diversify their holdings and spread out the risk. As a result, they can continue to benefit from the fluctuations in the price of this virtual currency.
Another option available for those interested in putting money into the emerging field of digital currency is to invest in a mining campaign. Unlike typical investment vehicles, investments in a mining campaign carry a low level of risk. In addition, the rate of return on this type of investment is likely to be significantly higher than the value per share (VPS, or the fractional rate basis) that can be derived from investing in standard derivative instruments. It is for these reasons that investors are encouraged to look at these types of investments. Their success is most often tied to the difficulty of finding a profitable strategy.
A difficulty encountered by many when it comes to trading on the value per share basis is finding a profitable strategy. In most cases, investors must determine whether the purchase of a particular lot of virtual currency will result in a positive outcome. If not, the venture must then be sold to realize profits. Very few companies that offer mining as an investment endeavor can ascertain which ventures will yield a profit and which will not. Fortunately, this difficulty is often related to the difficulty of determining the precise rate of return that a company will realize over a certain span of time.
Many people are mitigating the risk inherent in such investments to purchase a “basket” of bitcoins. They are reducing the risk of losing all of the bitcoins in the specific basket. In most cases, the size of a basket containing a significant number of bitcoins is considerably smaller than the amount of money typically needed to launch a successful investment.
Several investment opportunities are associated with bitcoins. These opportunities range from buying and selling digital currency directly through specialized online services to purchasing shares of mining shares directly from professional investors. In all cases, these investments are completed quickly and at a price that is much lower than that of traditional exchanges. The ease of completing these transactions has made them very attractive to a wide range of potential customers. The ease of doing so makes it possible for new investors to receive their initial investment in less time than would otherwise be possible. The appeal of the bitcoins to potential customers has resulted in a surge of new interest among traders and investors in the area of bitcoins as an investment opportunity.
